The U.S. Federal Reserve does not expect to sell any of the billions of dollars worth of assets it bought to boost the economy in 2009 until it has started raising interest rates in a strong recovery, it said in its 2009 annual report released on Monday.
The Federal Reserve currently does not anticipate that it will sell any of its securities holdings in the near term, at least until after policy tightening has gotten under way and the economy is clearly in a sustainable recovery, the Fed said.
The annual report recapped comments about asset sales the Fed has made in reports after meetings and in speeches by policymakers.
After the Fed cut interest rates to near zero in December 2008, it started buying mortgage-related debt to provide additional stimulus to the flagging economy. In so doing, the Fed more than doubled the size of credit it has made available to the economy to about $2.3 trillion from about $900 billion.
Most Fed officials agree they should return the Fed's balance sheet to precrisis size and eventually sell the $1.4 trillion in mortgage-finance agency debt and mortgage-backed securities that the U.S. central bank bought, minutes from its April meeting released last week showed.
Agency debt and mortgage-backed securities are maturing or are being prepaid at a rate of $100 billion to $200 billion a year, the Fed said in the annual report.
However, the Fed repeated that it is leaving the door open to active sales when the economic recovery is sufficiently advanced and when policymakers determine more tightening of financial conditions is needed.
(Reporting by Mark Felsenthal; editing by Jeffrey Benkoe)